Feds say aerospace review set for 2012

OTTAWA — The head of a group representing Canadian aerospace companies says an industry person will lead a sweeping federal review of the country’s aerospace policies.

The Aerospace Industries Association of Canada has been mandated to organize the consultations and the group’s chairman, David Schellenberg, says he expects to know the identity of the project leader within weeks.

“We understand that the leadership will be coming from industry,” he said Thursday.

The federal review comes as a result of pressure from the aerospace industry, which is increasingly concerned about new competition in the global market.

Industry Minister Christian Paradis told an Ottawa conference Thursday that the review will start early next year. He said he expects a report to be completed by the end of the year.

“We know, more than ever, that the continued success of this sector will take a strong commitment and great collaboration between government and industry,” Paradis said in a speech.

He was addressing a summit organized by AIAC, which represents the interests of more than 400 companies.

The announcement that a review would be undertaken was initially made in the ill-fated March federal budget.

Paradis says he’s still finalizing some details of the review, which will focus on federal policies affecting the space industry as well as the aerospace sector.

Steve MacLean, the head of the Canadian Space Agency, says there are advantages to having the space sector lumped in with the aerospace industry in the review.

“I support that in a major way (and) I am anxious to see the terms of reference of the policy review,” he told reporters.

The Canadian aerospace industry, which ranks fifth in the world, has annual revenues exceeding $22 billion.

MacLean says sales in the smaller space sector totalled $3.4 billion last year, with 50 per cent coming from exports.

The CSA head has been working on the space agency’s own long-term space plan since 2008 and MacLean expects it will be incorporated into an overall aerospace strategy.

“To take what we’ve already done and put it in the context of the larger picture makes excellent policy sense and so we will support that,” MacLean said.

The conference also heard that emerging economic powerhouses like China are changing the face of the international space industry.

Daniel Goldberg, the president and CEO of Telesat, says the implications are broad — not only for the space industry, but beyond.

He described how resource-hungry China shares satellite technology with poorer countries, which can not only drag down prices within the industry but also have a geopolitical impact.

“The Chinese use their space capabilities to sort of expand their influence around the world,” he told AIAC’s First Aerospace Summit.

“They gave a satellite to Venezuela, they gave a satellite to the African countries — and that then distorts the market in which we sell our services.”

Michel Pley, the CEO of ComDev International, also has his eye on the new arrivals in the space market; like Goldberg, he also sees business opportunities there.

He says the so-called BRIC countries — Brazil, Russia, India and China — “are putting billions and billions of dollars into their space programs and we have a huge opportunity to participate.”

“We have to be there and we have to play the game in those countries.”

Pley adds that ComDev has seen a tremendous amount of change in China since the company first went there 15 years ago — and changes have also been noticed in India.

MacLean told the conference the two weeks he recently spent in China were an eye-opener.

The former Canadian astronaut says the Chinese are, for starters, copying everything the Russians build.

“If you had the privilege of going there like I have, you would see that what they’re doing — it would roll your socks down about how much they’re spending on space infrastructure,” MacLean said.

“It is far more than any other country is spending.”

MacLean also says he’s currently working on an umbrella agreement with China, but adds that “it’s complex and is not going to happen overnight.”

He said the talks, led by the Department of Foreign Affairs and International Trade, are currently in their early stage and exploring what the relationship should be between Canada and China.

MacLean admits there are industrial and military risks with closer co-operation, but he adds that Canada can’t ignore an emerging power in the world.

His message in two words: “Embrace China.”

Schellenberg says there’s no doubt aerospace is “at an indelible turning point” and the next few years will be a critical time for the industry in Canada.

“The global market is growing quickly; well-supported competitors are developing around the world,” he said.

“What happens over the next 12-18 months will set the stage for the next generation of aerospace in our country,” he told industry representatives.

The next aerospace summit, which is being envisioned as an annual event, will be held for the second time in November 2012.